1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
daser333 [38]
3 years ago
12

Weighted average cost of capital American​ Exploration, Inc., a natural gas​ producer, is trying to decide whether to revise its

target capital structure. Currently it targets a 50​-50 mix of debt and​ equity, but it is considering a target capital structure with 70​% debt. American Exploration currently has 6​% ​after-tax cost of debt and a 12​% cost of common stock. The company does not have any preferred stock outstanding. What is American​ Explorations current​ WACC?
Business
1 answer:
saw5 [17]3 years ago
3 0

Answer:

American​ Explorations current​ WACC is 9%

Explanation:

The computation of WACC is shown below:

= (Cost of equity × equity percentage) + (after-tax cost of debt × debt percentage)

= (12% × 50%) + (6% × 50%)

= 6% + 3%

= 9%

Since we have to compute only current WACC so we considered the 50-50 ratio. Hence, we ignored 70% cost of debt

WACC shows a relationship between debt, equity and the preferred stock.

You might be interested in
Sam closed the doors to her home-based consulting company only two years after opening because she was tired of working 80-hour
blondinia [14]

Answer:

There is sacrifice to having your own business. Sam wasn't ready to invest the hours needed to make it on his own.

Explanation:

There are many advantages to opening a new business. When you are an entrepreneur it is easy to get lost in all the benefits and don't pay attention to many os its disadvantages.

A big disadvantage is that you are always at work, you are working everywhere at all times. There are no off days, if you’re not working, then you’re not earning. You don’t need to be engaged 24/7 to have a chance at success in the world of entrepreneurship, but you will be working a lot more often.

Most people who find success in the world of entrepreneurship are working longer, harder days than the average “traditional” employee. You do have some flexibility when putting in those hours, so you can structure medical appointments, school visits, and other family needs within your day. You do not have the luxury of cutting back on your hours most days.

There is sacrifice to having your own business. Sam wasn't ready to invest the hours needed to make it on his own.

3 0
3 years ago
A​ monopolist's maximized rate of economic profits is ​$2 comma 700 per week. Its weekly output is 900 ​units, and at this outpu
LuckyWell [14K]

Answer:

Average total cost= $46

Marginal revenue= $33

Explanation:

In this instance the monopolist's total cost is the revenue from sale of one unit less the economic profits per unit

Economic profit per unit= 2,700/900

Economic profit per unit= $3

Average total cost= (Price per unit) - (Economic profit per unit)

Average total cost= 49 - 3= $46

For this instance marginal revenue is equal to marginal cost.

Marginal revenue= Marginal cost= $39

3 0
2 years ago
Selected information from Gerrard, Inc.’s financial activities in the year 2004 was as follows: Net income was $330,000. The tax
ValentinkaMS [17]

Answer:

$0.26

Explanation:

diluted earnings per share (EPS) = (net income - preferred dividends) / (weighted average outstanding shares + diluted shares)

net income = $330,000

preferred dividends = 2,000 x $500 x 8% = $80,000. Since the preferred stocks are convertible, they will be considered diluted shares. Therefore, no preferred dividends will be included in the calculation.

weighted average outstanding shares:

  • January 1 = 700,000 x 12/12 = 700,000
  • March 1 = 200,000 x 10/12 = 166,666.7
  • total weighted average = 866,666.7

diluted shares = 2,000 preferred stocks x 200 = 400,000

diluted EPS = $330,000 / (866,666.7 + 400,000) = $0.260526247 ≈ $0.26

8 0
3 years ago
You want the salespeople on your staff to perform at their best, thus you want to make sure they are properly supervised. In det
lbvjy [14]

Answer:

Factors to consider:

1. Specialisation role

2. Complexity of sales process

3.Tenure

4.Geographical coverage

5. Sales Representative leadership

6. Support network

7. Internal Bureaucracy

8. Value add of managers

Factors not to consider;

1. Market share

2. Production process

3. Distribution process

4. Personal affiliation, race or religion

Explanation:

When considering a company's span of control, which simply means the number of junior staff a manager should manage, it is important to note factors relating to geographical coverage, a wide coverage can create difficulties in supervision to a manager. Consequently reducing the span of control.

Specialisation also help in ensuring the manager is an expert in the area he or she supervise. Experienced manager with good understanding of the tasks, good knowledge of the workers and good relationships with the workers, will be able to supervise more workers

The complexity of a sale process can affect a manager's supervision performance. if the sale process for example require an online payment to a final user who may not be physically available. Supervising such sales requires adequate training.

Other factors like; Tenure, Sales Representative leadership, Support network, Internal Bureaucracy, Value add of managers are paramount in determining span of control. However, market share, production process, distribution process and personal affiliation, race and religion should not affect the span of control.

3 0
3 years ago
Read 2 more answers
Boris works as a receptionist. He's happy with his salary, he gets along well with his coworkers and his boss, he feels no stres
Naily [24]

Answer: Person-Vocation fit

Explanation: According to the question, Borris lacks Person-Vocation fit as he isn't fully satisfied in his current field of employment as a receptionist, he is aspiring for a better more Noble job profession.

Although Boris has no issue with his current company of employment, he is not satisfied with his job.

7 0
3 years ago
Other questions:
  • A company sold equipment for $100,000; the equipment had cost $300,000 and had accumulated depreciation of $180,000. The company
    14·1 answer
  • The major consideration of whether something can serve as money is that it must be
    11·1 answer
  • Southwestern College has budgeted $1,800 for administrative and marketing expenses. It plans to hire a band which will cost anot
    9·1 answer
  • A currency drain occurs when
    14·1 answer
  • Private investment as a share of the economy tends to be higher in countries with ___ levels of economic freedom.
    11·1 answer
  • Pension data for David Emerson Enterprises include the following:
    11·1 answer
  • Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations: Provided $82,000 of services
    10·1 answer
  • Write a 100-word draft of the memo, keeping in mind the formatting rules you have learned. Because this memo is short, it doesn'
    8·1 answer
  • First Fiddler's Bank has foreclosed on a home mortgage and is selling the house at auction. There are three bidders for the hous
    7·1 answer
  • hola ¡antes estaba como ruedanatalia222 nose que paso se me borro la cuenta los puntos los corazon los seguidores las CORONAS ¡¡
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!